EU commissioner warns over China's investment climate

European trade commissioner Karel De Gucht has raised concerns that "economic openness in China is not improving".

The Belgian commissioner told participants at a European Policy Centre debate on the future of EU-China economic relations that there was a "vast untapped potential" between the two regions.

"Important sectors in China remain capped or closed for foreign investment," he said.

"The fundamental imbalance between our openness and China's restrictiveness plays into the hands of those in Europe who see Chinese investments as a threat and argue that we should therefore selectively screen Chinese investments in the EU."

However, he added that "there is a general feeling that economic openness in China is not improving".

De Gucht said that China was "in many ways defining the economic age we live in", and credited the country with "driving global growth at a difficult time for the international economy".

BusinessEurope president Jürgen Thumann presented the findings of the organisation's report on 'rising to the China challenge', saying that Beijing's "market reforms and impressive economic growth have been historic in their proportions".

However, he agreed with De Gucht that difficulties remained in the investment climate.

"China continues to be a special case for foreign business," Thumann said.

"Whether it is the location of resources, investment or access to raw materials - the state still controls the commanding heights of the economy in China."

He pointed out that the OECD "still considers China one of the most restrictive countries for foreign investment in the world", adding, "It is impossible for foreign companies to establish an independent foothold in Chinese market."

Thumann welcomed an increase in China's presence in Europe, but said, "We cannot ignore that European companies do not receive the same level of openness in china. To address this situation we have prepared the negotiation of a bilateral investment treaty."

Chong Dahai, a senior economic journalist at China's Xinhua news agency in Brussels, insisted that "foreign companies received equal treatment as Chinese companies".

He added that "China has been acting as a locomotive of world economic growth" for the past two years, and described Chinese companies as "very earnest in their investment". "They want to cooperate with local people and make worthwhile investments," he said.

The debate, which comes ahead of the EU-China summit in Tianjin on October 25-26, also examined the issues surrounding intellectual property rights and public procurement.

There was also discussion over access to raw materials, something Dahai described as a "critical and sensitive topic". He said, "Rare earths not only a commodity but of strategic importance."

Thumann raised concerns about what he called China's "aggressive raw materials strategy", and called on the EU to implement a strategic raw materials policy to address these concerns.